North Shore Towers Debates ‘Buy Versus Generate’

A North Shore Towers open Board meeting on the “buy versus generate” question was held on August 20 to present research findings that yielded a recommendation to continue on-premise energy generation.

The Towers has generated its own power for 35 years but is considering whether to continue with self-generated power or to purchase from ConEdison, in the interest of finding the most cost-effective choice. The open Board meeting was an opportunity to report on the pros and cons of each option to the Board of Directors, as well as to the community.

Bob Ricken, President of the Board, said “the Board will certainly consider the input from all of you tonight.”

The study, conducted by professional engineers George Nagelberg and Sal Castro, included calculations for several possible outcomes over the course of 25 years. Their calculations involved millions of potential dollars and concluded that, even if ConEd would not raise their rates for the next 25 years, on-premise generation was the way to go.

The findings were in sync with the opinion of most of the residents in attendance, where they offered support and praise for the findings.

Jerry Grossman said “most of the residents that I’ve spoken to want to continue to generate our own power.”

Grossman and Jerry Pasahow said they felt that, in the long run, it would be cheaper to generate power at the Towers and wondered how, in the case of a blackout, residents would be able to get to their apartments on the upper floors.

“We had everything on here during the blackout [of 2003]. We were in good shape,” said Grossman.

Sylvia Brownstein, a resident at the Towers for three years, said, “I have lived in Shelter Rock and Great Neck; I have experienced blackouts. My husband is in a wheelchair and on oxygen so it’s very important to me that there are no blackouts. North Shore Towers has never had a blackout and I would like to keep it that way.”

According to the research data presented, if the Towers was to purchase power from ConEd, the company would bring a power line to the property’s edge through three feeders. From there, a sub-station would have to be built on-site, tearing up 600 feet of the golf course to reduce the voltage to work in the current system.

The cost of building the sub-station and the installation of the feeders required to hook up to ConEd would cost $11 million.

However, that isn’t to say that self-generation would dodge expensive installations. New engines for the generator have to be installed over the coming years to replace aging equipment and to comply with new environmental regulations. In addition, increasing fuel, insurance, water and other operational costs were added into the equation.

In the most efficient option, six engines of the generator would be replaced starting in the year 2013 and finishing in 2020. The new engines will increase fuel efficiency by nearly 28 percent by the time the third engine is installed. If the Department of Environmental Conservation mandates faster installations, replacements can be done at a rate of five engines in three years, but at a higher cost.

In the ideal option, the cost of maintenance and new engine installation will be $15 to $17 million.

In conclusion, the report said that self-generation would result in annual savings of $4.6 million, or of $107 million over the next 25 years.

“Therefore, we concluded that this is the way to go. Self-generation is the most economical way to go forward,” said Nagelberg.

After the presentation concluded, residents applauded the presentation but brought up the question of cost.

Both options will require millions in initial costs, whether it is the $11 million construction of the ConEd sub-station or up to $17 million in engine replacements for the on-premise generators, and some residents questioned if the Towers would be able to absorb such a large financial hit in such a short period of time.

In response, Ricken said that there has been an increase in the reserve fund to undertake large projects like these, and that there is enough money to get the project well underway for at least three to four engines.

Stella Resnick, resident at the Towers, said that when the 2003 blackout hit, “coming back to this area was like the Shangri-La. I think it’s important that we keep control of whatever happens here. We have done very well with our own system.”

The “buy versus generate” issue will most likely be voted on in the next board meeting.